The Brazilian online betting and gambling sector already generates billions of dollars and continues to expand. However, the market still faces a significant challenge: the operation of unlicensed platforms. A recent survey indicates that approximately 30% of all financial transactions in the segment occur outside the regulated environment, even with the advancement of regulations and the granting of licenses in the country.
According to data presented by the international consulting firm H2 Gambling Capital, the annual revenue of the legalized gambling market in Brazil is around R$ 38 billion.
The estimate was released during the presentation “Brazilian Betting Market: Size, Behavior and Regulatory Challenges”, held at Casa Brasil, a parallel event to ICE Barcelona, which brought together experts, authorities and industry representatives.
Why the illegal market still represents a significant portion in Brazil
To estimate the size of the unregulated market, the consulting firm used a combined methodology. First, it analyzed direct surveys with bettors. Then, it evaluated transactions via PIX (Brazil’s instant payment system) made available by the Central Bank. In addition, it incorporated digital traffic metrics.
Therefore, cross-referencing the data indicated that approximately R$ 15 billion in Gross Gaming Revenue (GGR) circulates annually outside the official system, a value that represents almost a third of the sector.
The study also assessed the behavior of the Brazilian public. In a sample of 3,500 bettors, approximately 60% stated that they prioritized properly licensed websites.
However, 30% said they did not know how to identify whether a platform was authorized to operate. At the same time, 20% showed indifference to regulation and opted for sites that offer more attractive bonuses. Only 3% declared an explicit preference for unregistered operators.
According to Ed Birkin, Managing Director of H2 Gambling Capital, the presence of the illegal market is not unique to Brazil. However, he explained that methodological differences often inflate or underestimate these estimates.
Thus, variations of just a few percentage points in the measurement of the “offshore” market can alter projections of revenue collection, taxation, and the definition of public policies.
International comparisons and impacts of regulation
In comparison with other countries, Brazil presents characteristics similar to those of markets considered mature. For example, the United Kingdom, Italy, and Australia maintain between 60% and 85% of bets in regulated environments.
This occurs even under strict rules and a high tax burden. For Birkin, considering that Brazil already has more than 70 licensed operators and broad product coverage, it would be unrealistic to project a level of legalization much below that level.
The study also raises a warning based on international experiences. In this context, the case of the Netherlands emerges as an example of how excessively restrictive regulations can generate adverse effects.
Following the tightening of advertising rules and betting limits, the share of the legal market fell from 69% to around 50%. As a consequence, irregular operators gained ground.
Even in more conservative scenarios, in which the illegal market would represent about 27% of the total, the financial volume outside of regulation would still be high.
Therefore, for H2 Gambling Capital, this data reinforces the importance of balanced policies. These measures need to encourage bettors to migrate to licensed platforms without compromising the sector’s competitiveness.
Internationally recognized, H2 Gambling Capital operates in over 160 countries and serves as a benchmark in strategic analysis for operators, regulators, and investors.